On Thursday, Senate Majority Whip Dick Durbin sent a letter to Education Secretary Miguel Cardona to follow-up on requests for relief, known as borrower defense to repayment claims, for over 3,600 students defrauded by Westwood College in Illinois. The for-profit school shut down in 2015, and following its closure Illinois Attorney General Kwame Raoul filed a group borrower defense claim on behalf of students in the state's criminal justice program.
What harm did Trump do to student loan borrowers and how did this specifically address it if there was.
The article mentions how the Trump administration (and his appointee, Betsy DeVos) dealt with loan borrowers from these for-profit colleges that closed, leaving the students without a degree:
"These were the first group discharges since 2017, when former Secretary Betsy DeVos irresponsibly stopped processing borrower defense applications and issued blanket denials to clear the backlog before leaving the Department," Durbin wrote. "While I applaud the Department's actions to undo the harm caused by the Trump Administration and streamline access to debt relief that hundreds of thousands of borrowers are legally entitled to, I believe the Department also must provide group discharges for borrowers who attended Westwood College."
Durbin was referring to a methodology implemented under DeVos that compared the median earnings of graduates with debt-relief claims to the median earnings of graduates in comparable programs in order to determine if schools had overpromised earning potential and defrauded students. Compared to a 99.2% approval rate for defrauded claims filed under President Barack Obama, DeVos had a 99.4% denial rate for borrowers.
That's a lovely thought but we're dealing with bureaucrats that cannot accurately count the number of on-time payments a borrower in an IDR program has made. Asking them to determine how much of a consolidation loan is due to the oldest loans is totally beyond them.
The Biden administration has agreed to cancel an estimated $6 billion in federal student loan debt for about 200,000 borrowers who have claimed they were defrauded by their college.
About 200,000 borrowers will automatically get full debt relief -- no longer than one year after the date the agreement formally goes into effect, according to the proposed settlement agreement. Those eligible borrowers went to one of dozens of schools that the department has already determined engaged in misconduct that justifies debt relief, including The Art Institute, ITT Tech and Westwood College.
I'm familiar with some of the names of the schools on this list. One of the temp agencies that I briefly got involved with was pushing me toward programs offered by one of them. Other schools on the list sent me pitches. I'm so glad that I ghosted the temp agency and never responded to the other pitches. I could have been talked into something that would have had very bad effects on the next two decades of my life.
The U.S. Department of Education announced Tuesday that it will cancel all remaining federal student debt taken on by borrowers who were defrauded by ITT Technical Institute since 2005, delivering $3.9 billion in relief to some 208,000 people.